Pulte Home Corporation and Shiloh Farm Investments LLC v. Montgomery County, Maryland et al

Filing 195

MEMORANDUM OPINION. Signed by Judge George Jarrod Hazel on 8/25/2017. (kns, Deputy Clerk)

"~ ~.f''-Ff? r-".IN TIlE UNITED STATES DISTRICT
C(jUJU
FOR TIlE DISTRICT
OF MARYLAND

Southern

AND
LLC,

' .....

zm AUG 25

Division

~.. ~.)

P 2: 5 I

..
,~
.,

*
I'UL TE HOME CORPORATION
SHILOH
FARM INVESTMENTS,

•. "

*

Plaintiffs,

Case No.: G,JlI-I-t-3955

*

v.

*

MONTGOMERY
COUNTY,
MARYLAND,
el :11.

*
*

Defendants.

*
*

*

*

*

*

*

*

MEMORANI>lJM
I'ulte Homc Corporation
made a suhstantial

investment

hopes of developing

*

*

in 541 acres of undevelopcd

LLC (collcctivcly.

land in Clarkshurg.

Steps taken hy Montgomery

Capital Park and Planning Commission

collectively.

to change zoning. imposc ncw restrictions

and scwer scrvice to Plaintiffs'
litigation.

*

Spceifically.

Plaintiffs

1983. alleging violations

that the Defendants'
Plaintiffs

property havc frustrated

of substantive

and procedural

and

and delay or dcny watcr

cfforts and led to this
pursuant to 42 U.S.c.

due process and cqual protection

and

to a taking fiJI' puhlic use without just compensation.

asserted their claims pursuant to the Maryland

bcie)re the Court is Defendants'

in

(the "County")

(the "Commission"

have assertcd claims against Defendants.

actions amounted

havc additionally

Plaintiffs'

"Plaintiffs").

Maryland

County. Maryland

and the Maryland-National
"Defendants")

*

*

*

OPINION

and Shiloh Farm Invcstments.

the property.

*

Motion feJr Judgment

on the Pleadings

Constitution.

Pending

Pursuant to red. R. Civ.

P. 12(c). ECF Nos. 145 and 146.1 A hearing on the Motion was held on August 8.2017. See Lac.
Rule 105.6 (D. Md. 2016). For the following reasons. Defendants' Motion is granted.
I.

BACKGROUND!
This dispute stems from zoning actions taken by the County regarding 541 acres of

undeveloped land in Clarksburg. Maryland near the Ten Mile Creek. west of 1-270. which is
either owned by or under contract to be purchased by Plaintiffs. ECF NO.2 at 1-2. In 1994. the
County designed and approved the Clarksburg Master Plan (the "Master Plan") to guide the
development of Clarksburg along the 1-270 eorridor. while implementing measures to protect the
loeal water quality. IcI. ~ 10. Plaintiffs' property was to be zoned for residential development. and
was designated as a Transferable Development Rights ("TDR") receiving area. Ill. ~ 9. T\)Rs are
development credits whieh. when purchased. allow property holders to develop their property at
a higher density. The Master Plan divided Clarksburg development into four sequential stages.
and Plaintiffs' property was included in Stage 4. IcI.

'18.

Included with the staging plan were a

number of "triggers" to be met before Stage 4 could proceed. ill. ~ 10. and the Master Plan
directed that "[olnce all of the ... conditions have bccn met. the County Council "ill considcr
Watcr and Scwcr Plan amendments that would permit the extension of public I[lcilities to the Ten
Mile Creek area." IcI. ~ II. The Master Plan also provided that "alier conducting various
assessments:'

"the County Council may" ehoose to "[djefer action on a Water and Sewer Plan

category change. pending further study or consideration as deemed necessary and appropriate by
the Council." or ,,[c jonsider such other land use actions as are deemed necessary:' ECF No. 191-

I at 23.

Although each Defendant filed a separate Motion. the Commission simply incorporated the County's Motion and
in support by reference. Thus. the Court \\-'ill refer to them as a single Motion.
- Pin cites to documents tiled on the Court"s electronic filing system (CM/ECF) refer to the page numbers generated
by that system.
I

tvtclllorandum

2

Plaintiffs allcgc that betwecn July 2004 and February 2006. they invested ncarly $50
million in purchasing property to the west of 1-270. and spent an additional $12 million
purchasing TDRs from Montgomery County farmers. ECl" No. 2 ~ 15-16. Plaintiffs further
allege that the "triggers" contained in the Master Plan for Stagc 4 development wcrc mct in
2009. and that Plaintiffs liled a Watcr and Sewer Category Changc Rcqucst application on May
12. 2009.1d.'i 12. On September 17.2010. sixteen months alier Plaintiffs had submiltcd thcir
application. Defendants stated that PlaintilTs' application would not be processed until carly
Spring 2011. Id ,; 18. Howcver. Defendants did not act on Plaintiffs' application during that
period cither. nor did they act on it alier Plaintiffs resubmiltcd the application in August 2012.

Id. '119. In Dccember 2012. Plaintiffs submilted a "Prc-Application Conccpt Plan" to
Dcfendants. seeking revicw of their plan lor their propcrty. Id ~ n. DelCndants rcfused to
rcvicw PlaintilTs' application. and informed thcm that it was "too early to gct into having preapplications meetings on sites in thc Stage 4 area," Id

'i 23. Plaintiffs

submiltcd a number of

leltcrs to various Montgomery County officials rcquesting a decision on thcir prc-application. but
did not receive a substantivc response. Id. 'i'124-29.
On Octobcr 9.2012. the Montgomery County Council requested that the Planning Board
study the Ten Mile Crcek watershed and preparc an amendment to thc Master Plan. Id. ~ 36.
PlaintilTs or their agents submilted a number of leiters to Defendants and appeared at public
hearings. cxprcssing concern over the proposed amendment. Id 'i,\37-53.

Despite Plaintiffs'

vigorous opposition. on October 25. 2013. the Planning Board submiltcd a drali amendmcnt to
the County Council. proposing a heightcncd limit on the amount of impervious terrain in any
new developmcnt. a heightcned open space requirement. and a downzoning of Plainti ffs'
property from a rcsidential c1assilication to an agricultural classification. Id.

3

'i 54. Thc

County

Council subsequently held public hearings. during which Plaintiffs presented written and inperson testimony. and conducted a number of c10scd working sessions. Id. ~~ 57. 63. In March
and April 2014. the County Council approved the 10 Mile Creek Area Limited Amendment (the
"Amendment"). it!.

n 65-66.

which was subsequently adopted by the Commission. Plaintiffs

allege that the "cumulative effect of the severe and interrelated planning. zoning. and regulatory
restrictions" is that "Pulte can develop no more than 17 percent of its property .... " ECF NO.2

'1

83.
On November 14. 2014. PlaintitTs tiled a Complaint in Montgomery County Circuit
Court. ECl' NO.2. On December 18.2014. with the consent of the County. thc Commission
removed the case to this Court. ECl' No. I. The Complaint alleges a litany of constitutional and
state law violations including: violation or substantive due process rights under the Maryland and
United States constitutions and the Civil Rights Act or 1871 (Count I. ECl' NO.2 at 54):
violation or equal protection rights under the Maryland and Unitcd States constitutions and thc
Civil Rights Act or 1871 (Count II. ECl' NO.2 at 57): violation or the takings clauses or the
Maryland and United States constitutions (Count 111.ECl' NO.2 at 60): violation orproecdural
due process rights under the Maryland and United States constitutions and the Civil Rights Act
of 1871 (Count IV. ECF NO.2 at 62): and violation or Article 19 or the Maryland constitution
(Count V. ECl' NO.2 at (4). The Commission tiled a Motion to Dismiss on January 2. 2015. and
that motion was denied. ECF Nos. 19 and 33. The Commission then tiled a Motion ror
Reconsideration. which was also denied. ECF Nos. 36 and 46. The County did not originally
move to dismiss the Complaint and instead liled a timely Answer on January 14.2015. ECF No.

4

24. The Defendants now move for Judgment on the Pleadings:] ECI' No. 145-1. The Court
reviewed submissions from both parties and held a hearing on August 8. 2017. ECI' No. 194.
II.

STANDARD

OF REVIEW

Pursuant to Rule 12(c)... [a] fier the pleadings arc closed - but early enough not to delay
trial- a party may move for judgment on the pleadings," Fed. R. Civ. Pro. 12(c). In ruling on a
Rule 12(c) motion. courts apply ..the same standard as motions brought under Rule 12(b)(6),"
/vlassey]'. Ojalliil.

759 F.3d 343. 347 (4th Cir. 2014) (citing Edll'lll'dl' ]'. Cily of'Go!<!.I"I)()ro. 178

F.3d 231. 243 (4th Cir. 1999»). To survivc a Rule 12(b)(6) motion. "a complaint must contain
sufficient factual maller. accepted as true. to 'state a claim to relief that is plausible on its fiKe....
Asherofi

I'.

Iqhal. 556 U.S. 662. 678 (2009) (citing Bell Allalllie

Corp.

I'.

T\I'oll/hly. 550 U.S. 544.

570 (2007»). Courts will dismiss complaints under Rule 12(e) if"afier accepting all wcll-pleaded
allegations in the plaintiff's complaint as true and drawing all reasonable factual inferences Irom
those facts in the plaintitrs

favor. it appears certain that the plaintitTcannot prove any set of

facts in support of his claim entitling him to relief." Edwards. 178 FJd at 244. This Court's role
is to test ..the sufficiency of the complaint," and not to "resolve the merits of the plaintiffs
claims or any disputes of fael." Drager \'. [,LfIIA USA. Ille .. 741 F.3d 470. 474 (4th Cir. 2(14).
As such. the Court will assume all well-pleaded fllctual allegations in the complaint to be true.
See Belli/ora LLC \'. Bayer ConlulI/er Care AG. 819 1'.3d 697. 702 (4th Cir. 2016) .

.' Plaintiffs urge the Court to deny Defendants' Motion "because of Defendants' inexcusable and prejudicial delay in
bringing their Motion:' EeF No. 171 ot 9. While Defendonts tiled their Motion over two yeors olier PlointilTs Iiled
their complaint. the Court will consider (h~ Motion. Under Federal Rules of Civil Procedure l2(c). such Illotions
may be made so long as they arc "early enough not to delay triaL" Although discovery has commenced in this

matter. "no trial date has been set, 110tone deposition has occurred and no experts have been identified:' ECF No.
191 at 8. The mere fact that discovery has commenced is not enough to invalidate Defendants' motion. See. e.g.
Edu'ards. 178 r .3d al 240 (districl court considered and grunted Ru Ie 12 motion ..[a Iller a significant amount of
discovery had taken place:' and before a trial date had been sel): Ilete= \', Wells Fargo & Co .. 75 F. Supp. 3d 118 ..•.
1190 (N.D. Cal. 2014) ("'(n order to determine whether something causes a 'delay' inlhe IriaL there must be a trial
schedule set .... "). To hold otherwise \\lould be to increase unnecessary litigation costs where. as here. the Court
has determined that there is a case dispositive issue for which discovery is unnecessary to resolve.

5

III.

DISCUSSION
Defendants seek judgment on all claims. arguing that Plaintiffs have not alleged a

property interest. that Defendants had a rational basis for their actions and that Plaintiffs have not
alleged a taking. In support of their arguments. Defendants specifically point to the language in
the 1994 Master Plan and the 2014 Amendment. which they attach to thcir Motion. Plaintiffs
argue that the Court should not consider the documents attached to Delcndants' Motion and that
thcy have alleged sufticient tacts to state each claim. The Court will tirst consider whether the
documents attached to Defendants' Motion arc integral to the Complaint and then discuss the
substantive issues raised by the Motion.
A. The Master Plan and Amendment
he considered hy the Court

are integral to Plaintiffs' Complaint

and will

As a threshold matter. the Court must determine whether to consider the 1994 Master
Plan and the 2014 Amendment which Defendants attached to their Motion. The DetCndants
argue that these documents are "integral to the Complaint," ECI' No. 145-1 at 10. while Plaintifts
argue that these documents are not integral and contain disputed facts. ECF No. 171 at 13-14.
Although. as a general rule. extrinsic evidence should not be considered at the Rule
12(b)( 6) or 12(c) stage. the Fourth Circuit has held that when a defendant attaches a document to
its motion to dismiss. "a court may consider it in determining whether to dismiss the complaint
[ill it was integral to and explicitly relied on in the complaint and [if] the plaintifts do not
challengc its authcnticity,'.-l Phillips \'. LCIII1I'/ Inc.. 190 F.3d 609. 618 (4th Cir. 1999): see also
Parrino \'. FHP. Inc.. 146 F.3d 699. 705-06 (9th Cir. 1998). In American Chimpraclic
Associalion

1'.

7l-igon lIeallhmre.

Inc.. the Fourth Circuit reasoned that "ltJhe rationale

underlying this exception is that the primary problem raised by looking to documents outside the

-I

PlaintifTs have not challenged the authenticity of the attached documents.

6

complaint-lack

ol'notice to the plaintiff-is

dissipated where plaintiff has actual notice ... and

has relied upon these documents in I'raming the complaint." 367 F.3d 212. 234 (4th Cir. 20(4)
(quotations omilted). The Fourth Circuit has previously cited with approval Second Circuit cases
t(lr the proposition that "a document is integral to thc complaint where thc complaint rclics
heavily upon its terms and cftect." (ioil7e.\'

I'.

Valley 01l1Y. Sen'.\'. Bd. 822 FJd 159. 166 (4th Cir.

2(16) (internal quotation marks omilted) (quoting Chall/her.\' \'. Till/e Warner. Il7c.. 282 r.3d 147.
153 (2d Cir. 2002)). On the othcr hand. il'the complaint includcs only a few quotes Ii'om a
document and thc plaintiffs claims "do not turn on. nor arc thcy othcrwisc bascd on. statcments
containcd" in the extrinsic document then the document is not intcgral to the complaint. Id
Courts in this Circuit have reasoned that an integral documcnt is one that by its "vcry cxistcncc.
and not the mere information it contains. givcs risc to thc legal rights asscrted:' Che.\'apeake Bay
FOlll7d.. Il7c. \'. Se\'Cr.\'lal Sparroll'.\' Poil7/. LLe. 794 F. Supp. 2d 602. 611 (D. Md. 2(11). As
examples. "courts havc found intcgral the allcgedly I'raudulent document in a Iraud action. the
allegedly libelous magazinc articlc in a libel action. and the documents that constitutc thc corc of
the parties' contractual rclationship in a breach of contract dispute:' Id n.4.
Herc. thc 1994 Mastcr Plan and 2014 Amcndmcnt arc clearly intcgralto thc Complaint.
Throughout the Complaint. Plaintiffs rcpeatedly allege that thcir propcrty rights wcre crcatcd hy
thc 1994 Mastcr Plan. and that those samc rights werc violated by the 2014 Amcndmcnt. See.
e.g.. ECF No. 2 ~ 87 (alleging that Defendants failed to lillfill certain ohligations containcd in the

Master Plan):

~i (laying
65

out thc spccifics ofthc 2014 Amcndmcnt): ~ 86 (alleging that

rcstrictions in the 2014 Amendmcnt wcre an ahuse and violated Plaintiffs' rights): '1100
(allcging that "Defendants' 2014 Amcndment"" denicd Plaintitfs cqual protection of the law).
This is not a case whcre Plainti ffs merely quoted thc Master Plan and Amcndmcnt a lew timcs:

7

rathcr. PlaintitTs rcfcr to thc Mastcr Plan and Amcndmcnt cxtcnsively in thcir Complaint. and
thcir e1aims arc inhcrcntly bascd on thcsc documcnts. As such. thc Court tlnds that thesc
documcnts arc similar to thc "allcgedly fraudulent documcnt in a li'mld action. the allegcdly
libclous magazinc artielc in a libel action. and the documcnts that constitutc thc corc of the
partics' contractual relationship in a brcach of contract disputc;' and will considcr thc documents.
Chesapeake Bay Found, JnL'..794 1', Supp, 2d at 623. n.45
B. Plaintiffs fail to plead sufficient Substantive and Procedural Due Process claims
as they did not possess a constitutional property interest, and Defendants acted
rationally
Having considcrcd the 1994 Master Plan and 2014 Amcndmcnt. it is e1ear that Plainti ffs
did not posscss a constitutional propcrty intercst in thc "usc and dcvelopmcnt of thc subjcct
propcrty:' and that Dcfcndant's conduct was not "arbitrary. capricious. or unrcasonable:'

ECF

No, 2 ~ 85. As such. Plaintiffs' Substantive and Proccdural Duc Process claims cannot survive a
Rule 12(c) motion,
Thc Fourtccnth Amcndment prohibits any State from depriving "any person oflill:.
liberty. or propcrty. without duc proccss of law" U,S, Const. amend, XIV ~ I, This contains both
a substantivc as well as a proccdural protection. To state a violation of substantive duc process
undcr thc Fourtccnth Amendmcnt. plainti ffs must allege ..( 1) that [thcy I had property or a
property interest: (2) that thc statc dcprivcd [thcml of this property or property interest: and (3)
that thc statc's action falls so lar bcyond thc outcr limits of legitimate governmental action that
/1(1

process could cure the dcllcicncy:'

Quinn \', Board orCounly COllllllissionel's/i'1' Queen

Anne ',\'Counly. AId .. 862 F,3d 433. 443 (4th Cil'. 2017) (cmphasis in original) (quoting .~:I'h'ia
DCI',

!'i

COI]I, \', Cah-erl Oy.. 48 F.3d 810. 827 (4th Cir. 1995)), In analyzing a zoning provision.

The remaining documents attached

10

Defendants' Motion present a closer question and have not been considered

by the Court,

8

the court in Quinn stated that. ..[tlhis is a high bar. and an action is illegitimate only if the alleged
purpose behind the state action has no conceivable rational relationship to the exercise of the
state's traditional police power through zoning:' Id. (internal quotations omitted). To establish a
violation of procedural due process. plaintiffs must show that "( I) they had property or a
property interest (2) of which the defendant deprived them (3) without due process of law:'
Sunrise Corp. of'Myrtle Beach

1'.

Cit)' of'A~I.,.tleBeach. 420 F.3d 322. 328 (4th Cir. 2005). Of

key importance here. both the substantive and procedural due process violations depcnd on the
plaintitTs possessing a constitutional property intercst. Here. the Court Iinds that Plaintiffs did
not possess such an interest. and dismisscs their Due Proccss claims.
I. Plaintiffs did not possess a property interest in the zoninl?,statns of their
property or in their ril?ht to water or sewer access
The Fourth Circuit has instructed that ..[tlhe tirst stcp in analyzing whether the
[defendants J deprived [plaintiffs] of substantive due process is a determination of whether thcy
possessed a propel1y interest ... that is cognizable under the Fourteenth Amendment's Due
Process Clause:' Gardner

P.

Cit)' of'Baltil11ore Mayor and Cit)' COl/ncil. 969 F.2d 63. 68 (4th Cir.

1992). Although Plainti ffs allege that they possessed a property interest to "develop under [the
Mastcr Plan] in accordance with its terms:' as well as a protected right to have their "watersewer reclassification application" processed by the Defendants. the language of the Master Plan
indicates otherwise. Eel' No. 171 at 30-31.
The Fourteenth Amendmcnt does not crcate property interests: rather. they "are created
and their dimensions are defined by existing rules or understandings that stem from an
independent sourcc such as statc law ... :. Board 'iI'Rege11ls \'. Roth. 408 U.S. 564. 577 (1972).
"To have a property interest in a benetit. a person clearly must have more than an abstract need
or desire for it. He must have more than a unilateral expectation of it. He must. instead. have a

9

legitimate claim of entitlement to it:' Id In Gardner. the Fourth Circuit explained that "whether
a propcrty-holder possesses a legitimate claim of entitlement to a permit or approval turns on
whether. under state and municipal law. the local agency lacks all discretion to deny issuance of
the permit or to withhold its approval. Any significant discretion conferred upon the local agency
defeats the claim ofa property interest:' Gardner. 969 F.2d at 68 (emphasis in original). There.
city oflicials denied plaintitrs

proposals for residential devclopment ofplaintifrs

property. Id at

64. In response. plaintiffs filed suit. alleging procedural and substantive due process. equal
protection. and Takings Clause violations. Id at 66. Aflirming the district court's order of
summary judgment in favor of the defendants. the Fourth Circuit reasoned that the defendants
had "significant discretion" to reject "properly submitted applications" and "submitted final
plans" under city regulations. Id at 69-70. As such. plaintiffs did not have a property interest in
developing their property as residential units. and the Fourth Circuit artinned summary judgment
for the defendants on all counts.
Similarly here. Defendants possessed significant discretion to change the zoning
requirements Plaintiffs' property was subject to. as well as to delay or deny water and sewer
change requests." First. more generally. in a "Notice to Readers." the Master Plan provides that:
Area master plans are intended to provide a point of reference with regard to public
policy .... [TJhey should be referred to by public oflicials and private individuals when
decisions are made that aftect the use of land within the plan boundaries. Master plans
generally look ahead about 20 years from the date of adoption although they are
intended to he updated and revised llhout every 10 years. It is recognized that
circumstances will change following the adoption of a plan and that the specifics of a
master plan may hecome less relevant over time.
Eel' No. 191-1 at5 (emphasis added). More specifically. Plaintiffs essentially allege that once
the Master Plan's Stage 4 triggers for development were met. the Defendants had an obligation
Property owners do not have an inherent property interest in having water and sewer service on their property.
(!llhe En\' .. 910 A.2d 1100.1122 (Md. 1006). As such. any proPCl1y interest that Plaintiffs
possess regarding the water and sewer service would come from the terms orthe Master Plan.

<>

JVt!~rerl\'. Df!parlmel11

10

to act on PlaintifTs' water-sewer

reclassitication

application.

ECF NO.1 71 at 32. But Defendants

were not so constrained

by the Master Plan. While the Master Plan makes clear that once the

triggers occur. "County

Council will consider water and sewer eategory changes that would

permit the extension

of public facilities to the Ten Mile Creek area:'

the Council was not

required to act on or approve any such requests. The Master Plan provides that alier conducting
various assessments
Plan category
appropriate

... the County Council may" choose to "[d]efer action on a Water and Sewer

change. pending further study or consideration

by the Council:'

or "[clonsider

as deemed necessary

and

such other land use actions as are deemed necessary:'

ECF No. 191-1 at23.
As in Gardller. the amount of discretion
interest or expectation

of entitlement

processed.

Plaintiffs.

invalidates

that Plaintiffs may have had in developing

under the original zoning requirements
application

left to the Defendants

any property
their property

of the Master Plan. or in having their water and sewer

who claim to have heavily relied on the details of the Master

Plan in deciding to purchase their property.

were on notice that the terms of the Plan could

change. and that the Delendants

broad discretion

Plan change or to implement
the Stage 4 development

maintained

"such other land use actions as are deemed necessary:'

most favorably to the Plaintiffs.

"legitimate

e1aim of entitlement."
protected

even alier

triggers were met. As such. even viewing the facts contained

Complaint

constitutionally

to defer action on Water and Sewer

property

in the

Plaintiffs cannot now claim that they possessed

a

ECF No. 171 at 327 Because Plaintiffs did not have a
interest. their substantive

due process and procedural

due

7 Plaintiffs also contend that they possesseda property interest in the "fee simple ownership" of their property and
Transferable Development Rights ("TDRs"). While this is correct. the Plaintiffs do not allege that they have heen
deprived of this property interest. as they still own the property and TDRs. Plaintin's' claims allege that they have
been deprived arthe ability to develop their property under pree~isting zoning standards: it is 10 this right that the
Court linds Plaintiffs did not hold a property interest.

I1

process claims (Counts I and IV) cannot survive Defendants' Rule 12(c) motion and are
dismissed.

S

2. Even if Plaintiffs
rationally

did possess a propert). interest, Defendants acted

Even if Plaintiffs had sufficiently pleaded a constitutionally-protected

property interest.

to state a substantive due process claim. they would still need to allege that ..the state's action
lalls so lar beyond the outer limits of legitimate governmental action that no process could cure
the deticieney:'

Quillll. 862 FJd at 443 (quoting Syil'ia De\'. Corp .. 48 F.3d at 827). In this

context. an action is illegitimate "only iI'the alleged purpose behind the state action has no
conceivable rational relationship to the exercise of the state's traditional police power through
zoning:' Id. The "significant hurdles" for substantive due process claims in this area reflect "our
oti-repeated 'extreme[ ] reluetan[ ce] to upset the delicate political balance at play in local landusc disputes .... Hellr)' \'. '!e{l'er.101ICOUllt)' Com'lI. 637 FJd 269. 278 (4th Cir. 2011) (quoting
Shootillg Poill/. L.L.C.

I'.

Cummillg. 368 F.3d 379. 385 (4th Cir. 2004)) (alterations in original).

"[I]n the context ofa zoning action involving property. it must be clear that the state's action
'has no foundation in reason and is a mere arbitrary or irrational exercise of power having no
substantial relation to the public health. the public morals. the public salety or the public weltare
in its proper sense .... ,~J'il'iaDel'. Corp .. 48 F.3d at 827-28 (quoting NeetOlI' ". Call1hridge. 277
U.S. 183. 187-88 (1928)).

Defendants also argue that Plaintiffs "had no vested right in prior zoning under Maryland law:' ECF No. 14S~ I at
8. This point is uncontested by the Plaintiffs. \vilo did not have a vested right as they did not possess a permit and
had not yet begun construction on the subject property. Prine/! George's Cly. \'. Sunrise Del". Ltd. Parlf1l.!rship. 623

II

A.2d

1296. 130 I (Md. I Q(3)(reasoning

that "in order to obtain a vested right in an existing

zoning use that will be

protected against a subsequent change in a loning ordinance prohibiting that lise, the o\\'ner must initially obtain a
valid permit. Additionally. in reliance upon the valid permit. the owner must make a substantial beginning in
construction and in committing the land to the permitted usc before the change in the zoning ordinance has
OCCUlTed").

12

Here. the lacts as pleadcd in the Complaint and contained in the 2014 Amendment. which
the Court has determined to be integral to the Complaint. do not show that Defendants acted
arbitrarily or irrationally. with "no substantial relation to the pliblic health:' In lact. thc
Amcndment explicitly lays out its purported reasoning. which this Court is in no position to
second-guess as long as there is a substantial relation to the public health. See Gardner. 969 F.2d
at 69 (noting the "need for local autonomy in a matter of paramount local concern" and that
"decisions on matters of local concern should ordinarily be madc by those whom local rcsidents
select to represent them in municipal governmcnt-not by federal courts'").
Generally. the Amendment explains that its passage is the result of the "Montgomery
County Council['sj"" conclusion that "environmental analyses showed continued uncertainty
about the ability to protect sensitive resources in Ten Mile Creek if full development occurred
under the original Plan recommendations:'

ECF No. 191-4 at 14. Furthermore. the Amendment

was intended to "achieve two important objectives: the creation of a complete. well-deli ned
corridor town that provides jobs. homes and commercial activities: and the preservation of
natural resources critical to the County's well-being:' Id. The specilics of the Amendment that
Plaintiffs bemoan-e.g.

ECF No. 2 ~ 86 (referencing "a radically low impervious cap:' "a

radically high open space requirement. "parkland dedication requirement:' etc.)-are each
explained in the Amendment as being substantially related to public health or welfare. See. e.g.
ECF No. 191-4 at 26-27 (explaining that "restricting imperviousness ... provides the best
chance of protecting these streams:' and that ..[III Jaintaining and expanding the fi.lrest cover [by
requiring open space 1 is essential to protection of water quality and habitat""). Even assuming all
lacts in the Complaint as true. it is still rationally conceivable that the Amendment was passed in
an attempt to protect Ten Mile Stream. which is indisputably a legitimate exercise of

13

Defendants' police power: as such. this Court would dismiss Plaintiffs' substantive due process
claims even ifthcy possessed a constitutional property intcrcst:" See. e.g. SlIIoke Rise. In('.

1'.

Wash. Suh. Sanillll}' COIIIIII'n.400 F. Supp. 1369. 1383-84 (D. Md. 1975) (in granting motion to
dismiss due process claims. explaining that "it is reasonable. ifnot cssential. that thc statc act to
prevent the pollution of its waters by human wastes and thc cpidcmics of diseasc which flourish
under such conditions").
C. Plaintiffs'
irrationally

EqUll1 Protection

Claim similarly
singled out by Defendants

fails, as Plaintiffs were not

Plaintiffs contend that through the 2014 Amendment. they wcre irrationally singled out
and treated differently by Defendants. in violation of the Fourteenth Amendment's Equal
Protection Clausc. However. while Plaintiffs wcrc treatcd diffcrently from potentially similarly
situated developcrs.lo the Amendment establishcs a rational basis for this differential trcatmcnt.
The Equal Protection Clausc of the Fourtcenth Amendmcnt "kecps governmcntal
decisioll111akcrs from treating dilkrcntly

persons who arc in all relevant respects alikc:'

Nordlinger \'. I/ahn. 505 U.S. I. 10 (1992). It is worth bcaring in mind. however. that in
governing. the government will "inevitably differentiate in somc lilshion bctwecn pcoplc. so
outsidc of certain suspect groups likc race or national origin. the general rulc is that legislation is
presumed to be valid and will be sustained if the classilication drawn by the statute is rationally
related to a legitimate state intcrest." Quinn. 862 FJd 433 (quotation marks omittcd) (quoting
Cily ()(Clehurne

1'.

Clehurne Lh'ing Or .. 473 U.S. 432. 440 (1985 )). The Fourth Circuit has

advised that "[iJt is cmphatically not the function of thc judiciary to sit as a supcr-Iegislaturc to
., The C0U11cannot conclude that Plaintiffs' procedural due process claim would not survive Defendant's Rule 12(c)
Motion if the Court were to find that Plaintiffs possessed a constitutionally-protected
property interest. Indeed .. 'the
process due is dependent upon the specific circumstances ofa deprivation:' which would inherently require the
Court to make cCliain findings ofHlct./Imken 1'. Gardner. 927 F. Supp. 2d 227. 239 (D. Md. 2013). Regardless. the
Court need not make such a determination. having concluded that Plaintiffs did not possess the requisite property
interest to sustain a procedural duc process claim.
10 Defendants
conccded during argumcnt that Plaintiffs were treated ditTerently.

14

judge the wisdom or desirability of legislative policy determinations made in areas that neither
affect fundamental rights nor proceed along suspect lines:' Van IJer Unde Housing. Inc. ".
Rinll1na Solid Waste Authority. 507 F.3d 290. 293 (4th Cir. 2007) (internal quotations omitted).
A classification "neither involving fundamental rights nor proceeding along suspect lines is
accorded a strong presumption of validity:' Heller

I'.

Doe. 509 U.S. 312. 319 (1993). In fact. the

Supreme Court has articulated that "a legislature that creates these categories need not actually
articulate at any time the purpose or rationale supporting its c1assilication:' Ill. at 320 (internal
citations omitted). Instead. "a classification must be upheld against equal protection challenge if
there is any reasonably conceivable state of facts that could provide a rational basis for the
c1assitication:' Ill. (internal citations omitted). Indeed. a plaintiff challenging a non-suspect
c1assitication bears a "heavy burden of negating every conceivable basis which might reasonably
support the challenged classification:'
Communicatiolls Commissioll

I'.

Van Del' Linde Housillg. 507 F.3d at 293 (citing Federal

Beach Communicatiol7S. IlIc.. 508 U.S. 307. 315 (1993».

Plaintiffs' allegations. in light of the text of the Amendment. cannot meet that heavy
burden. The 2014 Amendment makes clear that even iI'the Defendants treated Plaintiffs
differently from similarly situated individuals. they had a conceivably valid reason for doing so.
The 2014 Amendment makes a distinction between properties East of 1-270 and those West of 1270. and treats them ditkrently.

ECF No. 191-4 at 50. In describing the restrictions on the

properties West ofl-270. the Amendment explains that "ltJhese unique properties ... includell
the most sensitive subwatersheds." and that "[iJt is on these properties that preserving more
undeveloped and forested open space ... will most effectively reduce the impact of development

15

on water quality'" Id." This is undoubtedly a rational classilication. and. mindful of Plaintiffs'
heavy burden here. the Court will not second-guess Defendants' conclusion as to the most
elTective way to protect these watersheds. Cf: Syl\'ia. 48 F.3d at 828 (reasoning that "one cannot
deny that the impact of development on ... water supply is quintessentially a legitimate zoning
concern"'). Thus. Plaintiffs' Equal Protection Claim (Count II) is dismissed.
D. Plaintiffs have not sufficiently pleaded a puhlic taking in \'iolation of the Fifth
Amendment's Takings Clause
The Takings Clause of the Fitih Amendment requires that the government compensate
plaintiffs for "direct government appropriation or physical invasion of private property'" Lingle
\'. ChelTon U.S.A. Inc.. 544 U.S. 528. 537 (2005). and lor "regulation [thatJ goes too l~lr" in
restricting the use of private property. Quinn. 862 F.3d at 438 (quoting Po. Coal CO. I'. Mallllll.
260 U.S. 393 (1922». It docs not. however. create an affirmative obligation on local
governments "to enhance the value ofreal property'" Frol1l Royal & Warren C/y. Indlls. Park
COIjJ. \'. 7iJII'no/Frol1l Royal. 135 F.3d 275. 286 (4th Cir. 1998). or require compensation l'or all
"land-usc regulations that destroyed or adversely affected recognized real property interests'"
Penn Cent. Tramp. Co. \'. Ci/y o/Nell' York. 438 U.S. 104. 125 (1978).
There are two categories of actionable takings, First. where the government "requires an
owner to suffer a permanent physical invasion of [itsl property" or "'completely deprive[s] an
owner of all economically beneficial usIe

r of [its 1 property'"

the Government has per

.I'e

taken

the owner's property. Lingle. 544 U.S. at 538 (emphasis in original) (quoting Lucas \'. .'loll/II
Carolina Coas/al Council. 505 U.S. 1003. 1019 (1992)). Second. where the government action

II Plaintiffs disagree that regulating development of its property will "most efTectively"' protect the "mosl sensitive
watersheds:' and repeatedly argue that Plaintiffs' planned development "would result in an overall 'good' water
quality for the Ten Mile Creek." ECF No. 2 ~ 41. Ifl'laintifi's' c1aillllUrned on whether the\' arc correct. that woold
almost certainly involve a factual dispute. lIowever. Plaintiffs' disagreement. even ifcorrc~t. do,cs not make
Defendants' reasoning irralional. which is the standard here.

16

does not rise to the level of a per se taking. regulatory takings are governed by the standards set
forth in Penn Celli. Tramp. Co. ". Nell' fork City. 438 U,S, 104 (1978). which turn largely on
..the magnitude ofa regulation's economic impact and the degree to which it interfercs with
legitimate propcrty intcrests."' Here. accepting as true all facts contained in the Complaint and
considering the Master Plan and Amendment. Plaintiffs have not sufticiently pleaded a Takings
Clause violation.
First. Plaintiffs elearly do not plead a physical or complete taking under LuClis. Plaintil'ls
state that they can still develop "17 percent of its property. approximately 93 of its approximately
541 acres."' ECF No. 2 ~ 83. As such. Plaintiffs have not bcen deprivcd of"all cconomically
benelicial use" of its property.
Second. Plaintilfs do not plead a sufticiently actionable regulatory taking under Penn
Central. In determining whether a government regulation amounted to a taking of property under
Penn Central. courts look to three factors: (I) the "economic impact of the regulation on the
elaimant."' (2) ..the extent to which the regulation has interfered with distinct investment-backed
expectations."' and (3) ..the character of the governmental action."' Penn Celli. 7hl/1.\p. Co.. 438
U.S. at 124. "lAJ 'taking' may more readily be found when the interference with property can be
characterized as a physical invasion by government ... than when interference arises from some
public program adjusting the bcnefits and burdens of economic life to promote the common
good."' It/. at 124.
I!ere. the economic impact docs not rise to the level of a constitutional violation. As the
Fourth Circuit cxplained in Quinn. "[a] regulation is not a taking merely because it 'prohibitlsj
the most benelicial usc of the property."' Quinn. 862 F.3d at 442 (quoting Penn Cent .. 438 U.S. at
124. and citing Hadaeheek

1'.

Sehastian. 239 U.S. 394. 405. 409-10 (1915)). In Concrete Pipe

17

and I'roducls olCa!" Inc.
.

1'.

Conslruclion Lahorers I'ension Trusl .fiJI'So. Cal.. 508 U.S. 602.

645 (1993). the Court reasoned that "our cascs havc long established that mere diminution in thc
value of property. however serious. is insurticient to demonstrate a taking:' See. e.g.. Village 0{
Euclid \'. Amhler Really Co.. 272 U.S. 365. 384 (1926) (approximately 75% diminution in
value): Hadacheck \'. Sehaslhm. 239 U.S. 394. 405 (1915) (92.5% diminution).
Following this reasoning. at least one Circuit has agreed that a diminution in value
similar to what Plaintiffs allege is not surticient economic impact to constitute a taking under
I'enn Cenlral. See MHC Financing Ltd. I'arlnership

1'.

Cily of San Rafitel. 714 F.3d I I 18. I 127

(9th Cir. 2013) (reasoning that an "81% diminution in value ... would not have been suflicient
economic loss or interference with [the plaintilrs]

reasonable investment-backed expectations to

constitute a taking"). Plaintiffs have not pleaded with specificity how much the value of their
property was diminished. but do state that they can now develop "no morc than J 7 perccnt of its
property:' While this does not mean the property's value diminished by 83%-prcsumably

the

remaining 83% that cannot bc dcveloped retains some value-cven a total diminution of 83%
would bc in thc rangc that courts have previously found insurticient to amount to a regulatory
taking under I'enn Cenlral.
Similarly. Plaintiffs' claim fails under thc sccond I'enn Cen/ral tllctor. as the Amendment
did not interfcrc with thcir reasonable "investment-backed

expcctations:'

Plaintiffs argue that

they cxpcctcd to "be able to proceed with a large scale development of the property" on the basis
ot: among other things. the Master Plan. ECF No. 171 at 46. Typically. detemlining whether a
rcgulation interfered with reasonable "investment-backed

expectations" requires a fact-spccilic

inquiry: however. thcsc expectations must bc "objectively reasonablc:' and whcrc thc dcfcndant
has significant discretion to apply zoning rcstrictions. a developcr's "cxpectations wcrc

18

reasonable only if the [defendant's] interpretation was c1carly erroncous:' HOllie Bllilders Ass 'II
(!I'Grealer ChicoRO \'. ChicaRo. 213 F. Supp. 3d 1019. 1030 (N.D. Ill. 2016). Ilere. as in Qllilln.
Pulte made a "highly speculative" invcstment in the land. 862 F3d at 442. I'ulte knew that any
development was dependent on receiving approval for sewer and water. which under the Mastcr
Plan could be "defer[red] ... pending futhcr study or considcration as decmcd necessary and
appropriate by the Council." ECl" No. 191-1 at 23. Ilm'ing alrcady concludcd that thc Mastcr
I'lan granted Defendants significant discretion and that Defendants' conduct lell within that
discretion. thc Court tinds that Plaintiffs have not sufliciently pleaded the second I~lctorunder
I'ellll Central.
Finally. as in Qllillll. the character of the Amendment docs not suggest a taking.
"Interference with property is less likely to be considered a taking when it 'arises from some
public program adjusting the bcnefits and burdens of economic lite to promote the common
good,''' Qllillll. 862 F.3d at 443 (quoting I'ellll Cenl. Tramp. Co.. 438 U.S. at 124). Regulations
that control dcvelopmcnt bascd "on density and other traditional zoning concerns" are the
paradigm of this type of public program. HemT. 637 l".3d at 277. This takes into consideration
the fact that "[I local governments need to be able to control the density of development to
prevcnt the overburdening of public services. environmental damage. and other harms:' Qllinn.
862 l".3d at 443.
Here. the Amendment is not "characterized as a physical invasion by government:'

I'enll

Cenl. 7i'ansp. Co.. 438 U.S. at 123. Rather. the Amcndment is"a rcasonable land-use regulation.
enacted as part of a coordinated ... stater

I and

local cffim to preserve the river and surrounding

land" )vll1rr\'. Wisconsin. 137 S. Ct. 1933. 1948 (2017).

19

Taking the facts of the Complaint as true and considering thc Master Plan and
Amendment. Plaintiffs have not sufticiently pleaded a violation of the Takings Clause under
Lueas or the three lactors of I'enn Cenlral. Thus. Count III of Plaintiffs' Complaint is dismissed.

E:.

State Claims

As an initial matter. to the extent Plaintiffs bring claims under Article 24 of the
Declaration of Rights of the Constitution of Maryland. those claims arc dismissed because claims
under Article 24 arc construed consistently with claims brought under the Filih and Fourteenth
Amendments to the United States Constitution. which will be dismissed. See. e.g. Roh!es v.
I'rill<'e George's 0)'.. 302 F.3d 262. 272 (4th Cir. 2002) (reasoning that "Article 24 and the
Fourteenth Amendment of the U.S. Constitution are construed as parallel with each other:').
Plaintiffs' claim under Article 19 of the Maryland Constitution lails as well. Plaintiffs
allege that their "right to redress for injury"' was "violated" when Defendants "[kept] the subject
property Irom being used and devcloped:' ECF No. 2 ~ 124. Article 19 guarantees "a right to a
remedy for an injury to one' s person or property" and "a right of access to the courts" .lacksoJl
Daekll10JlCo.. 30 A.3d 854. 866 (Mel. 20 II). This second right protects individuals Irom
"unreasonable restrictions upon traditional remedies or access to the courts but allows the
Legislature. pursuant to its authority to change the common law or statutory provisions. to enact
reasonable restrictions upon traditional remedies or access to the courts:' Id (quoting I'iselli \'.
75117 Sireel ;l4edicol. 808 A.2d 508 (Md. 2002)). Here. looking to the first protected right of

Article 19 as discussed in.laeksoJl. the Court concludes that Plaintiffs did not have a property
interest in developing their propcrty under the terms of the Master Plan. Regarding the second
protected right. Pulte argues that Defendants have placed a restriction on access to the courts:
however. this contention is without merit. The Court is not ruling that Defendants arc immune

20

I'.

from suit, or that Plaintiffs do not meet certain procedural requirements to access the courts;
rather, PlaintifTs have been granted access to the courts, and their claims have been found to be
deficient under Rule 12(c). Count V is therefore dismissed.
IV.

CONCLUSION
For the foregoing reasons, Defendants' Motion for Judgment on the Pleadings. ECF No.

145, ECF No. 146, shall be granted. A separate Order follows.

k/L-

Dated: AugustZ5, 2017

GEORGE J. HAZEL
United States District Judge

21